New Delhi [India], January 17 (ANI): The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the revival plan for Rashtriya Ispat Nigam Ltd. (RINL) for a total of Rs 11,440 crores. Rs 10,300 crore as equity capital and a Rs 1140 crore working capital loan.
RINL owns and operates the Visakhapatnam Steel Plant (VSP), the only offshore steel plant under the Government sector in the state of Andhra Pradesh.
Union Minister Ashwini Vaishnaw highlighted the package earlier today, mentioning that efforts are being made to modernise VSP and secure raw materials.
“This packet has been given to solve the historical legacy problems in RINL. Simultaneously, efforts are being made to secure raw materials for RINL, and for modernisation of the plant. This package combines a fresh equity infusion of Rs 10,300 crore and the conversion of a working capital loan into preference share capital of Rs 1,140 crore,” Union minister Vaishnaw said.
Vaishnaw also talked about the plan of the steel plant to have 3 blast furnaces to increase capacity.
“In the beginning, RINL will begin functioning with 2 blast furnaces and by August, it will start all 3 blast furnaces,” he added.
According to a statement by the Ministry of Steel, the condition of RINL is ‘critical,’ with the company having a liability of Rs 26,114 crore.
“The financial condition of RINL is critical (as of 31.03.2024, the net worth of RINL was Rs(-)4538.00 crore, current assets were Rs7,686.24 and current liabilities wereRs26,114.92 crores). RINL has exhausted the sanctioned borrowing limits from banks for working capital and was not in a position to get further loans from Banks. RINL also defaulted on the Capex Loan repayments and Interest payments in June 2024,” the ministry’s statement mentioned.
It was further mentioned how the equity infusion would be used to help with the operational problems and start another blast furnace.
The statement added, “The equity infusion of Rs10,300 crore into RINL will help it overcome the operational problems related to raising working capital and start Blast furnace operations most productively. This would allow the company to gradually reach its full production capacity which is critical and is in the national interest to have stability in the Indian steel market by augmenting steel production and also save the livelihoods of employees and those dependent on the operations of the steel plant.” (ANI)
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